Legal Insider: Reasons for Termination of Federal Disability Retirement

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This is a sponsored column by attorneys John Berry and Kimberly Berry of Berry & Berry, PLLC, an employment and labor law firm located in Plaza America that specializes in federal employee, security clearance, retirement, and private sector employee matters.

There are a number of circumstances that may cause the U.S. Office of Personnel Management (OPM) to end a federal employee’s disability retirement.

The three most common reasons why OPM would rescind federal disability retirement benefits include:

  1. Restoration to Earning Capacity: Until a federal disability retiree reaches the age of 60, he or she will typically be given a survey by OPM about the disability retiree’s annual income in the previous year. OPM may consider a disability retiree restored to earning capacity if the individual’s earnings from wages and/or self-employment in any calendar year while a disability annuitant reaches or exceeds 80 percent of the current rate of basic pay of the position the individual occupied immediately prior to retirement. If the disability retiree’s income reached the 80 percent earnings limit in any such calendar year, OPM will usually write (although sometimes belatedly) and inform the disability retiree that his or her disability annuity will terminate.
  1. OPM Deems an Individual Recovered: OPM may contact a disability retiree and ask the retiree to provide a current medical report from a physician regarding the status of the medical condition that was the basis for disability retirement. A disability retiree can also be asked by OPM about his or her current employment status and other relevant activities. If this information shows a recovery, then the disability retirement annuity may cease. If a disability retiree does not respond to the request by OPM, his or her disability annuity payments may also be suspended.
  1. Re-employment in the Federal Government: If a disability retirement annuitant is re-employed in the federal sector, his or her disability retirement annuity amount may change or terminate.

If OPM suspends or terminates an individual’s disability retirement annuity, the disability retiree can contest OPM’s determination and/or move to have his or her disability annuity restored depending on the situation.

For example, if a disability retiree is restored to his or her earning capacity but then later drops below the 80-percent threshold, the disability retirement annuity can be restored. Other examples include situations involving medically recovered individuals who experience later recurrences of the disability.

We represent employees in federal employee retirement and employment matters. If you need assistance with a federal retirement or an employment issue, please contact our office at (703) 668-0070 or at www.berrylegal.com to schedule a consultation. Please also visit and like us on Facebook at www.facebook.com/BerryBerryPllc.

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